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An Overview Which Comes first—strategy or structure? Form follows function But, once the form is in place, it impacts the function.

Chapter Outline The horizontal organization The need for coordination Task force, teams and project management

Coordination Quality of collaboration across departments

Evolution of Organization Structures Traditional Vertical Structure Teams and Project Managers for Horizontal Coordination Reengineering to Horizontal Processes New Workplace Learning Organization

Structural Design Task Force...A temporary team or committee formed to solve a specific short-term problem Team…Participants from several departments who meet to solve ongoing problems Project Manager…A person responsible for coordinating the activities of several departments

Traditional versus Learning Organizations Traditional Vertical Organization New Workplace Organization Horizontal structure is dominant 1. Horizontal teams, task forces, project management 2. Open information, horizontal communication, face to face 3. Decentralized decision making, participate strategy 4. Empowered employees, shared responsibility 5. Strong adaptive culture Dominant Structural Approach Vertical Structure is dominant 1. Few teams, tasks forces, or project managers 2. Vertical communications and reporting system 3. Centralized strategic decision making 4. Specialized tasks 5. Rigid culture

Chapter Outline Traditional organizations vs. the new workplace Horizontal structure Open information Decentralized decisions making & participative strategy Empowered employee Strong, adaptive culture

Empowerment Giving employees the power, freedom, knowledge, and skills to make decisions and perform effectively

Corporate Culture The set of key values. Beliefs, understandings, norms shared by members of the organization. Is the foundation of a learning organization

Strong, Adaptive Culture Values The whole is more important than the parts, and boundaries between parts are minimized. The culture is egalitarian The culture values change risk taking

Structure Follows Strategy Differentiation strategy, organization attempts to develop innovative products Cost leadership strategy, striving for internal efficiency

Chapter Outline Factors shaping structure Structure follows strategy Structure reflects the environment Structure fits the technology Structure follows the workflow

Influencing Organizational Structure Strategy Traditional Vertical Structure Environment Company Performance Technology New Horizontal Structure Interdependence

Three Things Happen Due To Uncertain Environments Increased differences occur among departments The organization needs increased coordination to keep departments working together The organization must adopt to change

Environment versus Structure

Woodward’s Manufacturing Technology Small batch and unit production Large batch and mass production Continuous process production

Manufacturing Technology and Organizational Structure

Interdependence The extent to which departments depend on each other for resources or materials to accomplish their tasks.

Types of Interdependence and Required Coordination